Hitachi Construction Machinery : Financial Results for the First Quarter Ended June 30, 2023(IFRS)

Consolidated Financial Results for the First Quarter Ended June 30, 2023

(IFRS)	July 27, 2023
Listed company: Hitachi Construction Machinery Co., Ltd. (HCM)
Stock exchange: Tokyo (Prime Market)	Code number: 6305
URL: https://www.hitachicm.com/global/en/

Representative: Masafumi Senzaki, President and Executive Officer, COO

Scheduled date for submission of the Quarterly Securities Report: August 9, 2023

Scheduled date of commencement of payment of dividends: ―

Supplementary materials to the financial statements have been prepared: Yes

Presentation will be held to explain the financial statements: Yes (for institutional investors, analysts and journalists)

(Rounded off to the nearest million)

1. Consolidated results for the first quarter ended June (April 1, 2023 to June 30, 2023)

1. Consolidated results

(The percentages indicated show changes from the same period of the previous fiscal year)

				Adjusted		Income before				Net income
	Revenue				Net income	attributable to
		Operating income	income taxes
						owners of the parent
	Millions		%	Millions		%	Millions of		%	Millions	%	Millions of		%
	of yen			of yen			yen			of yen		yen
June 30, 2023	320,006		19.6	37,626		82.7	43,634		61.9	33,556	71.8	31,419		69.2
June 30, 2022	267,539		17.3	20,599		74.0	26,952		124.5	19,533	149.0	18,568		160.5

Note: "Adjusted operating income" is presented as revenues less cost of sales as well as selling, general and administrative expenses.

	Net income attributable to	Net income attributable to
	owners of the Parent per share	owners of the Parent per share
	(basic)		(diluted)
June 30, 2023		Yen	Yen
	147.74	147.74
June 30, 2022		87.32	87.32
References: Share of profits (losses) of investments accounted for using the equity method
June 30, 2023: ¥721 million	June 30, 2022: ¥564 million

(2)

Consolidated financial position

Total assets

Total equity

Total equity attributable to

Equity attributable to owners

owners of the parent

of the parent ratio

June 30, 2023

Millions of yen

Millions of yen

Millions of yen

%

1,735,276

749,746

703,726

40.6

March 31, 2023

1,627,003

701,040

659,992

40.6

2. Dividends status

Cash dividends per share

First

Second

Third

Year end

Total

Quarter

Quarter

Quarter

March 31, 2023

Yen

Yen

Yen

Yen

Yen

－

50.00

－

60.00

110.00

March 31, 2024

－

March 31, 2024

－

－

－

－

(Projection)

Interim and year-end dividends for

the fiscal year ending March 2024 are to be determined.

Note: Changes involving the dividend states for the fiscal year ending March 2024: None

(English translation of "KESSAN TANSHIN" originally issued in the Japanese language.)

3. Consolidated earnings forecast for the full year ending March 2024(April 1, 2023 to March 31, 2024)

(The percentages indicated show changes from the same period of the previous fiscal year)

												Net income
	Revenue		Adjusted		Income before		Net income attributable to	attributable
				to owners of
		Operating income		income taxes		owners of the parent
						the parent
												per share
March 31,	Millions of yen	%	Millions of yen		%	Millions of yen		%	Millions of yen		%	Yen
2024	1,300,000	1.6	140,000		3.2	131,000		16.3	82,000		16.9	385.57

Notes: Changes in consolidated earnings forecast: None

*Notes

1. Important changes in the scope of the consolidation during period(changes involving specific subsidiaries accompanying changes in the scope of consolidation): None
2. Changes in accounting policies; changes in accounting estimates

[1]	Changes in accounting policies required by IFRS	None
[2]	Changes in accounting policies other than those in [1]	None
[3]	Changes in accounting estimates	None

1. Number of outstanding shares (common shares)
   [1] Number of outstanding shares (including treasury shares)

June 2023 215,115,038

March 2023

215,115,038

[2] Number of treasury shares

June	2023	2,440,858
March	2023	2,465,562

1. Average number of common shares outstanding during the fiscal year (shares)
   June 2023 212,661,889
   June 2022 212,650,619

Indication of audit procedure implementation status

This earnings report is exempt from audit procedure.

Explanation on the appropriate use of results forecasts and other importantitems

Any forward-looking statements in the report, including results forecasts, are based on certain assumptions that were deemed rational as well as information currently available to the Company at this time. However, various factors could cause actual results to differ materially.

Please refer to ''1. Management Performance and Financial Conditions, (2) Outlook for the Fiscal Year Ending March 2024'' of the attachment for conditions serving as assumptions for results forecasts.

(English translation of "KESSAN TANSHIN" originally issued in the Japanese language.)

Index of the Attachment
1. Management Performance and Financial Conditions
(1) Management Results	2
(2)	Outlook for the Fiscal Year Ending March 2024	5
(3)	Analysis of Financial Condition	6
2. Consolidated Financial Statements
(1)	Consolidated Balance Sheets	8
(2)	Consolidated Statements of Income and Comprehensive Income
	Consolidated Statements of Income	9
	Consolidated Statements of Comprehensive Income	10
(3)	Consolidated Statements of Changes in Equity	11
(4)	Consolidated Statements of Cash Flows	13
(5)	Notes on Consolidated Financial Statements
	(Notes on the Preconditions for a Going Concern)	14
	(Segment Information)	14

(English translation of "KESSAN TANSHIN" originally issued in the Japanese language.)

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1. Management Performance and Financial Conditions

(1) Management Results

The company newly formulated the three-yearmedium-term management plan entitled "BUILDING THE FUTURE 2025," which began in the fiscal year ending March 31, 2024 and ends in the fiscal year ending March 31, 2026. We are committed to sustainable growth and improvement of enterprise value under four management strategies:

① Delivering innovative solutions for customer needs; ②Enhancing value chain business; ③Expanding business in the Americas; and ④Strengthening human capital and corporate capabilities.

During the 1Q of fiscal year under review (April 1, 2023 to June 30, 2023), demand for hydraulic excavators continued to decline sharply year on year in China, while demand in other regions remained high and comparable to the same period of the previous year, although there were signs of slowdown in Western Europe.

Demand for mining machinery remained firm overall, due to continued strong appetite for customers' investment against a backdrop of high resource prices and continued demand for overhaul and regular maintenance associated with high utilization.

Under these circumstances, production activities have been at a high level since the beginning of the period, and revenue significantly increased year on year in the Americas business, which has been undergoing full-scale independent development since March 2022; in addition, the mining business and the value chain business, on which we have been focusing our efforts, also grew significantly. These results, combined with the impact of foreign exchange rates and other factors, resulted in a significant increase in overall revenue to ¥320,006 million (an increase of 19.6% year on year), a record high for the 1Q.

As for consolidated income items, adjusted operating income increased significantly as a result of ongoing cost reduction activities and promotion of selling price increases, in addition to increased revenue and foreign exchange effects and other factors, despite the impact of increased costs, mainly in material and logistics costs. As a result, adjusted operating income was ¥37,626 million (an increase of 82.7% year on year), a record high for the 1Q as well as for revenue. Accordingly, net income attributable to owners of the parent amounted to ¥31,419 million (an increase of 69.2% year on year).

Business results by segment are described below.

• Construction Machinery Business

During the 1Q of fiscal year under review, revenue was ¥285,796 million (an increase of 19.4% year on year) and adjusted operating income was ¥33,850 million (an increase of 81.2% year on year), a significant year-on-year increase in both revenues and adjusted operating income.

Due to the continued strong performance of our full-scale independent development in the Americas from the previous fiscal year and robust orders in other regions, not only new machinery sales of both construction and mining but also value chain business centered on parts and services performed well, resulting in a significant year-on-year increase in earnings.

• Specialized Parts & Service Business

This segment consists primarily of Bradken Pty Limited and its subsidiaries, which are engaged in the parts and services business in the after-sales of mining facilities and machinery, and H-E Parts International LLC and its subsidiaries, which provide service solutions.

(English translation of "KESSAN TANSHIN" originally issued in the Japanese language.)

2

During the 1Q of fiscal year under review, revenue was ¥35,506 million (an increase of 21.8% year on year) due to the strong performance of the mining market environment. Adjusted operating income was ¥3,776 million (an increase of 96.6% year on year) mainly due to an increase in revenue and the impact of foreign exchange rates and an increase in profitable businesses as a result of business structural reforms that have been undertaken so far. This demonstrates a significant year-on-year increase in both revenues and adjusted operating income.

The above revenues of segments ① and ② are figures before intersegment adjustments.

Notes: The reportable segment "Solution Business" was renamed "Specialized Parts & Service Business" from the fiscal year ending March 31, 2024. This is only a change in segment name and does not have an effect on the segment information.

(English translation of "KESSAN TANSHIN" originally issued in the Japanese language.)

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